By Tiernan Ray

Oppenheimer & Co.’s Ittai Kidron this morning reiterates an Outperform rating on shares of Apple (AAPL), while writing that the news last night that the U.S. Patent and Trademark Office rejected a second Apple patent at center of Apple’s $1.05 billion victory in August against Samsung Electronics (005930KS), the so-called “pinch-to-zoom” patent., number 7,844,915, is a “potential setback.”

That patent relates to the user interface technique that allows multiple finger touches to manipulate on-screen objects, as on Apple’s iPhone and iPad, and now plenty of other devices as well.

Not only is Samsung appealing the August jury verdict, and this could help them, but it makes it harder for Apple to pursue licensing, using the verdict as a weapon, argues Kidron:

Samsung’s appealing that decision, and if a key patent used in the case is no longer valid, Samsung’s case for overturning the decision, and the amount of the damages, is much stronger. Having the ‘915 patent (and any others) invalidated also likely impacts Samsung’s (and other companies’) willingness to pursue a licensing agreement with Apple. Apple has been involved in several patent infringement cases with Android vendors (HTC, Motorola…), and while the results are mixed, it did use the courts to successfully push HTC to come to terms on a licensing agreement. We believe Samsung is unlikely to pursue a licensing agreement in the near term given Apple’s recent setbacks with the USPTO.

“Clearly,” writes Kidron, “this IP battle isn’t over. Although the verdict should put pressure on Apple’s shares, “We still believe the shares are overextended to the downside and embed too much pessimism regarding headwinds and execution,” he concludes.

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There are 13 comments

DECEMBER 20, 2012 10:50 A.M.

Ed wrote:

Tell this joker to get a life.

DECEMBER 20, 2012 11:29 A.M.

JC wrote:

It is very clear that Apple was the first to perfect the way we communicate to a touch screen. It is funny that Apple trusted Samsung to be a good partner and jointly developed IC's and touch screen technology to make the products a reality. Although it has not been made public, I think that Apple has learned their lesson and they are bringing everything in house. Samsung has been making TVs for years and I am sure that they can not wait to copy whatever Apple come up with. I hope that Apple takes it's time and gets good patents and new IC's in the books before they go public. It is hard to believe that the US government is constantly making it harder to do business. Now they issue a patent and take it away when some tries to enforce it. They will setup a task force to stop someone from selling a counterfeit Gucci hand bag, but you can sell counterfeit technology on the internet without a problem. Samsung has done nothing but copy products or make minor adjustments to existing products and call them the next big thing. As a consumer, I am awarding innovation and not the next big copy machine.

DECEMBER 20, 2012 11:55 A.M.

yarr wrote:

What took USPTO too long to invalidate pinch-to-zoom patent(s)?
No one can dictate how another person uses his fingers to hold a spoon or fork. All things with gestures are natural and common sense as intended by God.

DECEMBER 20, 2012 12:03 P.M.

BUTCH HOSE wrote:

Well then the USPTO NEEDS TO REFUND AAPL all the monies they spent to get these patents. Why do you issue patents to companies in the first place. AAPL SHOULD SUE THE USTPO for not telling them years ago that their patent was invalid.It seems to me that if a company was paying me money for a patent, that if I accepted their money and told them their idea was a good one and patentable , then 6 to 10 years later they shouldn't be able to overturn it .This is total BULLSHIT

DECEMBER 20, 2012 12:11 P.M.

RANDY WILHELM wrote:

APPLE should sue the USTPO for taking their $$$ for application and then reviewing the patent and accepting and giving AAPL trademark protection......Now all of a sudden it's not valid? The USTPO failed to tell AAPL what was wrong with their patent, yet charged them all those fees.Maybe the USTPO didn't even review any of the paperwork because they were too busy or had no one working for them that understood tech patents. They should be responsible for hundreds of millions of dollars in damages paid to APPLE. AAPL---> SUE THEM !!

DECEMBER 20, 2012 12:20 P.M.

SCOOCH ELLIOTT wrote:

People who buy Samsung products are morons. How can you support a company that steals from one of our greatest American companies? AAPL has hired 50,000 workers in the past 5 years and we should all boycott Samsung tv's and cell phones. Knowing SAMSUNG and their desires to drop nuclear weapons on the U.S.A , it wouldn't surprise me if we found some type of cancer - causing chemical inside the earpiece in powder form that causes brain cancer. KOREANS can not be trusted.BUY AAPL PRODUCTS AND KEEP AMERICANS WORKING.

DECEMBER 20, 2012 12:21 P.M.

Monkey See Monkey Do Inc. HQ: South Korea. wrote:

Samsung and Google create IP like this: They use Search and Cut&Paste. Then they attach their name to it before submitting it to the USPTO.

It was just a single rejection in a reexam. That happens all the time only to have the claims eventually confirmed without any amendment after the patentee argues over the rejection. Treating this as if the PTO "invalidated" the patent is pretty uninformed. It is more accurately a "potential" invalidation.

DECEMBER 20, 2012 2:31 P.M.

RJ wrote:

The sound of iSheep/iDiots crying is so enjoyable. Apple: The copy cat company of the century and you guys whine about this?!

DECEMBER 20, 2012 3:23 P.M.

paul bartel wrote:

why do ifans take these developements so personaly? What a bunch of crybaby losers.

DECEMBER 20, 2012 3:29 P.M.

Paulo Lin wrote:

Fantastic victory against the biggest tech bully of the century. I don’t understand such blinded Apple fanatics that pay over the top prices for a company that makes probably the highest profit margins that any other tech company has ever seen. iSheep, iDiots or iMinions, all the same. It makes no sense about all this Samsung, Google, etc copying APPLE. Apple is suing for phones that are square with rounded corners. God forbid if anyone would make a square table! That’s a copy of someone else invention! What a farce. In fact pretty much everything that Apple has done is a copy from the first “Mouse” and “Folders” feature in the 80’s was a copy of Xerox. Remember the “Lisa” computer? What about Apple Maps, ohhhh that’s a copy of Google Maps! Apple would sell much more and the stock would stop dropping so much if their greed of huge profits would be a little more reasonable. And these iDiots about Samsung dropping nuclear bomb, etc, wow I’ve seen it all. Apple is the biggest copier of all. iMinions, google the youtube video “Has Apple Really Ever Invented Anything?” and you’ll see exactly how smart Apple is. As they say in the video, Apple is like a chef, mixing up existing technology or bullying others and creating a product from other ideas. All of sudden, Apple is no longer so innovative and people are buying better products with better innovations. Samsungs LTE is innovative, not a “Retina” display (hocus pocus term for a high resolution). Oh and by the way Samsung launched their Galaxy S3 months before the iPhone 5 and now CNET has rated the iPhone 5 as in second place “Galaxy S3 beats iPhone 5 for best device of 2012 | - CNET”. Finally Samsung has innovated a new unbreakable screen for their new smartphones coming out in 2013. How come Apple hasn’t come out with that?

DECEMBER 20, 2012 3:32 P.M.

Vic wrote:

@JC - do you mean how Apple will make an iTV that lets you watch videos on it from the web, and post to facebook or twitter or use facetime/skype to video conference? All of this and run any app from the App Store plus browse the web and watch regular TV? Samsung and Sharp have been doing that for years, clearly it's Apple who is copying others.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.